Stewardship activities in brief
ADMIRAL GROUP
A meeting about the company’s remuneration policy, specifically to clarify the congruency of targets and performance metrics.
AMBEV
A call to discuss the independence of board directors and express our concerns about the Chair of the Board and another director. We also expressed our intention to vote against the remuneration plan at the upcoming AGM as we think the proposed increase is excessive.
ARCELORMITTAL
Co-signed a letter asking ArcelorMittal for further transparency on the pathway towards setting and achieving its climate targets. Later in the quarter, we met with the company individually to discuss progress made, including its health and safety issues and how the risk culture was being addressed through controls, systems and executive remuneration. We also discussed how ArcelorMittal could harness green steel as a competitive advantage and how it planned to align its reporting with a new European framework.
ASHMORE GROUP
A meeting to discuss the revisions to the company’s remuneration policy.
BP
Following on from our meeting last quarter, a discussion about capital discipline and allocation in light of the company’s changing aims. We also discussed CEO remuneration and a shareholder resolution at the upcoming AGM, given recent fatalities.
DASSAULT AVIATION
A brief discussion ahead of the company’s AGM to clarify how land acquisitions from related parties are governed and to ensure succession plans are in place for family directors and directors associated with the controlling family shareholder.
DUPONT
A meeting to discuss the potential financial liabilities linked to litigation over PFAS (synthetic chemicals known as forever chemicals as they don’t degrade easily). We also explored the governance of integrating ESG strategy with corporate strategy.
EPWIN GROUP
A meeting about the company’s recycling initiatives (via recent acquisitions) and the business case for reusing and repurposing materials in Epwin’s operations.
EU COMMISSION
Co-signed a letter to the EU Commission, encouraging the removal of aeronautics as a specific activity under the EU Taxonomy.
JET2
A meeting to discuss the company’s use of carbon offsets to abate its emissions given the lack of support for sustainable aviation fuel, the nomination of female directors to the board and to senior management, and whether the board is considering linking the variable component of remuneration to ESG targets and metrics.
JDE PEET’S
A discussion covering the level of independence on the board and across the board’s sub-committees, the company’s relationship with ESG ratings agencies such as MSCI, and the recommendation from Institutional Shareholder Services (ISS) to vote against the remuneration proposal. On this last topic, we concluded that the size and metrics of the long-term and short-term incentive plans were acceptable, so we plan to vote in favour of the policy.
MARKS & SPENCER
A meeting focused on gaining a better understanding of the company’s unique management structure. The meeting ultimately reassured us that roles and responsibilities are clearly defined and there is a culture of challenge and honesty in the decision-making process.
M&T BANK
An introductory meeting to discuss the company’s relationships with ESG ratings agencies, plans to disclose to CDP and progress on the development of a climate risk framework and measurement of financed emissions.
NOBLE
An introductory meeting to discuss how the company is incorporating sustainability post-merger and to understand how reducing carbon emissions is contingent on strong customer relationships. We also encouraged robust ESG disclosure and engagement with ESG ratings providers.
PFIZER
A meeting covering a broad range of topics, including remuneration and gender diversity metrics, how the company ensures independence of its auditor, and succession planning for the lead independent director. We also clarified how the company was using power purchase agreements and carbon credits in its energy transition plan.
PROSEGUR CASH
A meeting to discuss the company’s MSCI rating and the recent voting recommendations provided by ISS.
RESONA
A discussion on the company’s initiative to reduce cross-shareholdings, which we support. We also wanted to understand the company’s sustainability initiatives, focusing on Net Zero targets, financing oil and gas projects, and gender diversity and inclusion.
SHELL
A group call to discuss performance and sustainability outcomes for 2022 and the remuneration policy for 2023. We also met with the Chair to discuss Shell’s energy transition strategy, whether it would set absolute Scope 3 emissions targets and its capital allocation strategy. We then met with the company again in response to the letter we sent to the CEO last quarter.
STRIX GROUP
A discussion on the company’s products that help reduce energy consumption in small appliances and how this offering appeals to ESG-minded investors.
SUNCOR
A meeting to discuss the company’s integration of ESG, the role of climate solutions within Suncor’s portfolio and its relationship with climate-focused initiatives. We also asked how the company is addressing safety problems in light of recent fatalities.
TENARIS
A discussion about the company’s strategy to reduce emissions, whether its 2030 target was sufficiently stretching and to encourage Tenaris to set a Net Zero goal or a science-based target. We also asked how the company engages with ESG ratings providers such as MSCI and ISS.
VELOCYS
A meeting to discuss capital allocation and strategy as the company pursues the production of sustainable aviation fuel.
VIVENDI
An opportunity to question the effectiveness of the audit committee, given it is not independent, and to suggest a clearer split of the nomination and remuneration committees. We also questioned the structure and efficacy of the metrics used in the remuneration policy.
VOLKSWAGEN
A comprehensive discussion that touched on the responsible sourcing of critical raw materials, human labour rights, executive remuneration, board independence and the company’s MSCI ESG rating.
WESTGOLD RESOURCES
A formal communication to the Chair and the managing director to discourage further dilutive capital raises.
YARA INTERNATIONAL
A meeting about the company’s progress on setting science-based emissions reduction targets, and the growth potential of the clean ammonia business.
The views expressed in this article are not intended as an offer or solicitation for the purchase or sale of any investment. The information is fact based and does not constitute investment research, investment advice or a personal recommendation, and should not be used as the basis for any investment decision. ©2023 Ruffer LLP is authorised and regulated by the Financial Conduct Authority